EPF stands to be one of the prestigious employee funds when it comes to retirement plans. EPF has fulfilled millions of dreams when it comes to post-retirement plans. Keeping these points in view, EPF has been made necessary for individuals earning less than 15001 Rs.
It is crucial for all the employees who have lower basic pay. All the individuals involved in labour work are also included under the EPF scheme. Moreover, companies having more than 20 employees are also liable to contribute to the EPF scheme. Every month, an employee and his/her employer contribute 12% of the employer’s basic salary into the PF account.
This amount accounts to be a good sum when interest is calculated on the sum. According to the EPFO guidelines, 8.55 % of the contribution you make is being paid as interest in the monthly contributions you make. But there always remains a question that in case after registering the establishment at any point in time, the number of employees working in it becomes less than 20, then will the Act apply? Employees face this query more often than not when working in less established organizations. So in this article, you will get the answer of the effect on EPF enrollment with the fluctuations on the number of employees
Effect On EPF Enrollment With The Fluctuations On The Number Of Employees
All the establishment that have once enrolled in the scheme of the EPF can’t back out from the scheme even if the organization have employees less than 15 employees. That is the establishment is continued to be governed by the EPFO organization under the EPF scheme even if the establishment has less than 20 employees. Any new enrollment into this type of organization is subjected to EPF enrollment at the time of joining itself.
This was a major query with the employees engaged in various startups where the initial number of employees is quite high that is the number of employees is crossing 20 employees. These establishments with a certain settlement and stability in business begin to lose on to their less important employees to cut their expenses.
Still, they can’t get away with the EPF contributing. Moreover, under difficult situations to which the organization is subjected, they are forced to let some of their employees go out of their wings. But the fact is that even this type of organization is subjected to pay in the EPF contribution to its retained employees.
Many small establishments might find themselves in difficult situations, where they could not retain more of its employees. Under this situation, the number of employees may get reduced below 20 employees but these organizations have to continue to pay in the EPF contributions. But the establishments should not consider this as a backdrop. Moreover, they should look over this as a method to promote a better image of their establishment among the future employees.